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Five days into the I.R.S. brouhaha, and things are proceeding on two distinct tracks. On the political track, hysteria has taken hold, as evidenced by President Obama’s decision to force the tax agency’s acting head, Steven Miller, to resign. On the substantive front, we now have preliminary answers to two key questions: What did the agency do wrong? And who ordered it to target conservative groups? Notwithstanding Miller’s resignation, which the President himself announced on Tuesday evening, the answers appear to be: not nearly as much as recent headlines suggest; and, nobody in the Obama Administration.

On Monday afternoon, the office of the Inspector General for Tax Administration, which spent months interviewing employees of the I.R.S. department that deals with tax-exempt organizations, and going through its records, released a fifty-four-page report. With President Obama denouncing the tax agency’s targeting of conservative groups as “outrageous” in advance of the report’s publication, and with Republicans trying to cast this as the new Watergate—“My question is, Who’s going to jail?” John Boehner said—it seemed reasonable to expect that there would be one or two bombshells. And there were. They just weren’t of the type that George Will and Mitch McConnell had been hoping for.

As far as Obama’s potential involvement and vulnerability goes—and that’s what everybody in Washington really cares about—here is the key passage in the report (“EO” stands for “Exempt Organizations” and the “Determinations Unit” is the office in Cincinnati):

We asked the Acting Commissioner, Tax Exempt and Government Entities Division; the Director, EO; and Determinations Unit personnel if the criteria were influenced by any individual or organization outside the IRS. All of these officials stated that the criteria were not influenced by any individual or organization outside the IRS.
“Come on,” I can hear Maine Senator Susan Collins and others saying. Are you so deep into the tank for Obama that you are seriously suggesting a group of low-level bureaucrats in Ohio came up with the idea of setting aside, for special review, applications from groups whose names contained the words “Tea Party,” “Patriots,” or “9/12 Project”? No, I am not making that suggestion. It comes from an agency that Congress created in 1999 to provide independent oversight of the I.R.S. In organizational terms, the Inspector General for Tax Administration comes under the ambit of the Treasury Department. But it is independent of the Department and all other agencies located therein. Since 2004, it has been headed by J. Russell George, a native of Brooklyn and a former prosecutor in Queens, who was appointed by President George W. Bush. The lead author of the report, Gregory D. Kutz, is a career public servant and forensic auditor who used to work for the Government Accountability Office, the investigative arm of Congress.

Here, again, is the report (“BOLO” stands for “Be On the Lookout”):

[T]he Determinations Unit developed and implemented inappropriate criteria in part due to insufficient oversight provided by management. Specifically, only first-line management approved references to the Tea Party in the BOLO listing criteria before it was implemented. As a result, inappropriate criteria remained in place for more than 18 months.
If you are a Republican member of the House Ways and Means Committee, the House Oversight and Government Reform Committee, or the Senate Finance Committee, all of which are rushing to schedule hearings on this great national scandal, such statements don’t offer much in the way of encouragement.

Never fear! Our intrepid representatives will come up with something. Rather than focussing on the body of the report, today’s Times reports, they are fixing on a single entry in the report’s appendix, which reveals—shock! horror!—that on August 4, 2011, I.R.S. officials in Washington, who by then knew about the Cincinnati office’s targeting of conservative groups, met with the I.R.S.’s chief counsel “so that everyone would have the latest information on the issue.”

You can see where this is going. Maybe the I.R.S.’s chief counsel, an Obama appointee by the name of William J. Wilkins, informed the Treasury Department’s chief counsel at the time, George W. Madison, who, in turn, told his boss, Tim Geithner, who, as we all know, was one of President Obama’s favorites and could surely be trusted to pass along to him any potentially troubling news. “What we don’t know, at this point, is whether it jumped the fence from the I.R.S. to the White House,” McConnell, the G.O.P. leader in the Senate, said on Monday. “But we do know this: we can’t trust the Administration to be forthcoming on the details of this scandal…”

Good luck with that line of attack, fellas. Doubtless, the various congressional committees will haul up before them a variety of officials from the I.R.S., the Inspector General’s office, and the Treasury Department. But unless they come up with something that’s not in the report, they are going to have a great deal of difficulty making this one stick to Obama.

If there is a dangerous forum ... that's the one. -- LWW (referring to BD NPR)

Of course, they will be able to indulge in the venerable (and, sadly, bipartisan) pastime of lashing out at the I.R.S. But even there, they will probably have difficulty in coming up with more than a few token scalps to add to that of Steven Miller, the agency’s now former head. Despite the reaction the report has engendered—including Miller’s effective firing and the launching of a criminal investigation by the Justice Department—it doesn’t provide any definitive evidence of wrongdoing at the I.R.S., or of the agency engaging in political bias. (My colleague Jeffrey Toobin asked a similar question.)

Yes, some I.R.S. officials in Ohio targeted for review applications for tax-exempt status from conservative groups. But they also reviewed applications from many groups that had nothing to do with right-wing populism. According to the report, roughly a third of the applications singled out had the words “Tea Party,” “Patriots,” or “9/12” in their names. But the rest of the groups that had their applications queried and put on hold—more than two hundred of them—didn’t have any such signifiers in their names. Evidently, at least one I.R.S. employee tried to point this out to the Inspector General’s staff: “According to the Director, Rulings and Agreements,” the report said, “the fact that a team of specialists worked applications that did not involve the Tea Party, Patriots, or 9/12 groups demonstrated that the I.R.S. was not politically biased in its identification of applications for processing by the team of specialists.”

The report doesn’t say whether the Inspector General accepted this argument, but it can’t be dismissed out of hand. It’s possible, I suppose, that the Cincinnati office was inhabited by a group of I.R.S. employees who detested the Tea Party and its hangers-on because of their anti-government stance, and who set out to hinder their activities. It’s also perfectly possible that what we had here was a group of overworked investigators who were swamped with a rising number of applications for tax-exempt status, and who were looking for short cuts to identify entities that were primarily political organizations rather than charities or social-welfare organizations.

Making that distinction, after all, was the I.R.S. employees’ job. As the report details, from 2010 onwards, there was a significant rise in the number of applications for tax-exempt status. (In 2011, the I.R.S. received almost sixty thousand applications for tax-exempt status as 501(c)3 charities and more than two thousand as 501(c)4 social-welfare organizations.) Given the rise of the Tea Party, it is probably safe to assume that many of these new groups had emerged from the populist right. With limited staffing and resources, the Cincinnati office may have realized that it couldn’t examine every application in detail. About seventy per cent of applications were approved after an initial review, with few or no demands for further information from the groups concerned. The issue was how to isolate applications that merited further inspection, and, in May, 2010, somebody in the Cincinnati office came up with the “Be On the Lookout” criteria related to the Tea Party.

As the report notes, “the criteria developed by the Determinations Unit gives the appearance that the IRS is not impartial in conducting its mission.” But appearances can be deceptive, and, outside of Washington, hard-working employees aren’t usually judged (and convicted) merely on the basis of them. If a cabal of I.R.S. employees had been engaged in a politically inspired plot to target the right, would they have formalized their criteria in a spreadsheet that any of their bosses could have inspected? Far from hiding what they intended to do, they showed the new set of criteria to their immediate supervisors, who didn’t see a problem with it, either. Didn’t anybody realize the whole thing could blow up? Apparently not. As detailed in the report, the real sin committed by the I.R.S. employees was that they “did not consider the public perception” of what they were doing.

That was silly of them. But was it wrong? The key issue, surely, isn’t whether the I.R.S. investigators were singling out right-wing or left-wing groups for further investigation. It is whether they were singling out groups that genuinely were charities or social-welfare organizations rather than political entities, and which, therefore, deserved tax-exempt status. If that was what occurred, the I.R.S. staffers weren’t doing their jobs properly, and they deserve disciplining.

The Inspector General’s staff reviewed almost three hundred applications that the I.R.S. field office had tagged as potential political cases. From the report:

In the majority of cases, we agreed that the applications submitted included indications of significant political campaign intervention.
To put it another way, most of the time the I.R.S. examiners appear to have got it right. Here are the exact numbers: of the two hundred and ninety-eight applications they flagged for further review, two hundred and seven were from organizations that genuinely appeared to be political groups.

What about the other ninety-one applications that the I.R.S. office flagged? In reviewing these, the Inspector General’s staff couldn’t find any immediate indication that they came from political groups, which is potentially troubling. But it doesn’t necessarily mean that the I.R.S. officials acted without due cause. As they explained to the Inspector General’s staff, some dubious applications “may not literally include statements indicating significant political campaign intervention.” And why is that?

According to EO function officials, organizations may not understand what constitutes political campaign intervention or may provide vague descriptions of certain activities that the EO function knows from past experience potentially involve political campaign intervention. In these cases, the EO function believes it is important to review the applications to ensure that political campaign intervention is not the organizations’ primary activity.

Does that sound unreasonable to you? If it does, hotfoot it down to Capitol Hill and get in line for the hearings, which will be largely devoted to politicians berating public employees for doing their jobs. If it doesn’t sound reasonable, and barring the emergence of something genuinely shocking or scandalous, you can safely tune out the whole sorry spectacle, which, sadly, already includes the President throwing bodies to the mob.

If there is a dangerous forum ... that's the one. -- LWW (referring to BD NPR)